ECSPB 31.10.2024 - Revenue and Capital Budget Monitoring as at 13 September 2024
Renfrewshire Council · 31 October 2024
Back to Education and Children's Services Policy Board — 31 October 2024 and its agenda
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To: Education and Children’s Services Policy Board On: 31 October 2024 Report by: Director of Finance and Resources and Director of Children’s Services Heading: Revenue and Capital Budget Monitoring as at 13 September 2024 1. Summary of Financial Position 1.1. The projected Revenue outturn at 31 March 2025 for Children’s Services is an overspend of £0.659m (0.3%) against the revised budget for the year. 1.2. The projected Capital outturn at 31 March 2025 for Children’s Services is a break-even position. 1.3. This is summarised in the table below and further analysis is provided in the Appendices. Table 1: Revenue Division Revised Annual Budget £m Projected Outturn £m Budget Variance £m Budget Variance % Children’s Services 256.996 257.655 (0.659) (0.3%) Table 2: Capital Division Revised Annual Budget £m Projected Outturn £m Budget Variance £m Budget Variance % Children’s Services 31.623 31.623 0 0% 2. Recommendations Members are requested to: 2.1. Note the projected Revenue outturn position for Children’s Services detailed in Table 1 above; 2.2. Note the projected Capital outturn position for Children’s Services detailed in Table 2 above; and 2.3. Note the budget adjustments detailed in sections 6 and 7.
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3. Children’s Services Revenue Budget Projection - overspend of £0.659m by 31 March 2025 3.1. The Revenue Budget Monitoring report at Appendix 1 identifies a projected annual overspend of £0.659m (0.3% of total budget). 3.2. It should be noted that the projected outturn position reported here is based on the latest information available, which is subject to change during the financial year. The impact of any change on this projection will be updated at each board cycle until the close of reporting Period 10. Budget holders are obliged to seek mitigating action to minimise significant budget variances. 4. Objective Analysis - Significant Variances 4.1. Early Learning & Childcare - £0.819m underspend Employee costs are currently projected to underspend, mainly due to vacancies; this is partly offset by an overspend in Transfer Payments. The vacancy position is under review with management. The overspend in Transfer Payments is due to the implementation of a nationally-agreed uplift in the rates paid to childcare providers. An over recovery of income is also projected in relation to wraparound care. The reduction in the forecast underspend since Period 3 is due to the application of previously agreed budget savings, partly offset by a reduction in projected Employee costs. 4.2. Primary Schools - £1.729m underspend Employee costs are currently projected to underspend and this is partly offset by projected overspends in Premises costs and Transport costs. The projected underspend in Employee costs arises mainly within teachers’ salaries. The Premises costs overspend is largely due to increased refuse collection costs and demand for janitorial supplies, and the Transport costs overspend is due to the SPT school transport contract being greater than available budget. This underspend has increased since Period 3 due to the removal of costs related to the teachers’ pay award for 2024/25, as full details of related funding is not yet known. 4.3. Secondary Schools - £0.677m overspend Employee costs, Premises costs and Transport costs are currently projected to overspend and are partly offset by a projected underspend in Supplies and Services. The overspend in Employee costs mainly arises within teachers’ salaries; the overspend in Premises costs is mainly due to refuse collection costs, and the Transport costs overspend is due to the SPT school transport contract being greater than available budget. The underspend in Supplies and Services arises within the schools PPP contract, where the annual contract increase is less than budgeted. 4.4. ASN Schools - £0.481m overspend Employee costs are currently projected to overspend, mainly arising within teachers’ salaries.
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4.5. Additional Support for Learning - £0.900m overspend Employee costs and Transport costs are currently projected to overspend. The overspend in Employee costs mainly arises due to an increase in demand for Additional Support Needs Assistants (ASNAs) within mainstream schools. The Transport costs overspend is due to the cost of ASN transport contracts being higher than available budget. 4.6. Facilities Management - £0.108m underspend Premises costs and Supplies and Services are projected to underspend and are partly offset by a small projected overspend in Employee costs. The Premises costs underspend may reduce during the year, as more of this budget is committed to small property repairs across the school estate. 4.7. Children & Families - £1.249m overspend Supplies and services, Third Party payments and Transfer payments are currently projected to overspend, partly offset by an underspend in Employee costs due to staffing turnover. The Supplies and Services projected overspend mainly relates to demand for both Care at Home for children with additional support needs, and payments to care leavers. The overspend in Third Party payments relates mainly to Fostering and Adoption services. The overspend in Transfer payments relates to Section 22 payments across localities. These areas will be kept under review. The increase in this forecast overspend since Period 3 relates to a more up-to-date assessment of the projected costs of Direct Payments, Fostering and Adoption and Short-term Respite. 5. Subjective Analysis - Significant Variances 5.1. Employees - £1.267m underspend A projected underspend in Primary teaching staffing is partly offset by projected overspends in Secondary and ASN teaching staffing. Projected underspends in non-teaching staffing in Children & Families and Early Learning & Childcare, arising mainly from staff turnover, are partly offset by an overspend in Additional Support for Learning due to the demand for Additional Support Needs Assistants (ASNAs). This has reduced significantly since Period 3 due to the removal of costs related to the teachers’ pay award for 2024/25, as full details of related funding is not yet known. 5.2. Premises Related - £0.319m overspend The overspend in Premises costs is mainly due to increased janitorial costs and refuse collection costs across the school estate. 5.3. Transport Related - £0.750m overspend The overspend in Transport costs is due to SPT contracts for both mainstream school transport and ASN transport being higher than available budget.
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5.4. Third Party Payments - £0.743m overspend The projected overspend in Third Party payments relates to Fostering and Adoption fees, following the implementation of the national rate for fostering allowances, and services related to Children with Disability, related to projected placement costs. This has increased significantly since period 3 due mainly to a more up-to-date assessment of the projected costs for the year of Fostering and Adoption payments and Short-term Respite services. 5.5. Transfer Payments - £0.926m overspend The projected overspend in Transfer payments relates to Early Learning & Childcare and to Children & Families. The projected overspend in Early Learning & Childcare is due to the increase in the sustainable rate to childcare providers. Although the Scottish Government has provided additional funding for this (£0.564m), a net overspend of £0.294m is projected. The projected overspend in Children & Families relates mainly to Section 22 payments and will be closely monitored throughout the year. The increase in this forecast since Period 3 relates mainly to a more up-to-date assessment of the projected costs for the year of Children & Families Direct Payments. 5.6. Income - £0.752m over-recovery A projected over-recovery of income is currently projected in Early Learning & Childcare in relation to cross-boundary charges for early years services, and in Children & Families in relation to charges to other divisions of the service not reported to this Board. This variance has increased significantly since Period 3 due to a more up-to-date assessment of the expected level of yearly recharge to Criminal Justice for justice services carried out by the Children & Families division. 6. Revenue Budget Adjustments 6.1. Under the Council’s financial regulations, Directors and their nominated officers, in consultation with the Director of Finance and Resources, have certain delegated authority to transfer sums between subjective budget headings within a service division to enable budget management throughout the financial year. This is known as ‘budget virement’. 6.2. Transfers between divisions of the same service / department in excess of £100,000, and transfers between services / departments must be authorised by the respective service Director and the Director of Finance and Resources for submission to the relevant policy board for approval. 6.3. The Director now seeks homologation from the Board for the following affected virements since the last report:
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Revenue Budget Adjustments Objective Heading Subjective Heading Amount (£m) Reason Children’s Services Premises Related (0.022) Corporate Landlord transfers relating to small repair projects Environment, Housing & Infrastructure Premises Related 0.022 Corporate Landlord transfers relating to small repair projects Children’s Services Supplies & Services 0.075 Cost of the School Day Chief Executive’s Service Supplies & Services (0.075) Cost of the School Day 6.4. The Director seeks approval for the following proposed virement, which addresses a significant variance in-year, and will be reflected in the next board report: Revenue Budget Adjustments Objective Heading Subjective Heading Amount (£m) Reason Children’s Services Supplies & Services (0.502) Reduced cost projection in relation to Schools PPP contract inflation Children’s Services Transport Costs 0.502 To mitigate inflationary cost pressure in relation to education transport contracts 6.5. The following budget adjustment is in line with the earmarking of funds set aside in previous years, and is therefore for noting only: Revenue Budget Adjustments Objective Heading Subjective Heading Amount (£m) Reason Children’s Services Various 1.093 Use of service reserves 7. Capital Budget Projection - break even position by 31 March 2025 7.1. The Capital Investment Programme 2024/25 to 2028/29 was approved by the Council on 29 February 2024. Education and Children’s Services approved Capital spend for 2024/25 is £31.623m. 7.2. The in-year Capital budget is forecast to break-even by 31 March 2025, however, this will be monitored as the projects progress. Further details of the programme can be found in the Capital Monitoring report at Appendix 3. 7.3. A number of budget adjustments have taken place between years to reflect revised programming of some capital projects. Details of the adjustments made since the previous Board report, which amount to £39.827m, are as follows:
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Capital Budget Adjustments Project Amount (£m) Reason Paisley Grammar School Community Campus (17.906) Budget decelerated to 2025/26 and beyond to reflect revised cashflows now that construction work is underway. Thorn Primary School (new build) (8.921) Budget decelerated into 2025/26. Only design fees are now anticipated in 2024/25. Second Dargavel Primary School (new build) (9.000) Budget decelerated into 2025/26. Park Mains High School extension (4.000) Budget decelerated into 2025/26. Total (39.827)
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___________________________________________________________________ Implications of this report 1. Financial The projected budget outturn position for Children’s Services’ Revenue budget is an overspend of £0.659m. Income and expenditure will continue to be monitored closely for the rest of the financial year and steps will be taken to mitigate any overspend, including virement, applying flexibility within specific grant funding as permitted by the Scottish Government, and potential use of earmarked reserves. The projected outturn position for Children’s Services’ Capital budget is a break-even position, after the adjustments set out at section 7.3. The Capital programme will continue to be monitored closely for the rest of the financial year. 2. HR and Organisational Development While staffing budgets form a significant proportion of the Council’s revenue budgets, there are no direct implications arising from the recommendations in this report. 3. Community/Council Planning Community Plan Our Renfrewshire is thriving The Council’s revenue and capital spend ensures that its facilities are fit for purpose and safe for the community, to maximise accessibility. Our Renfrewshire is well Our Renfrewshire is fair Our Renfrewshire is safe Council Plan Reshaping our place, our economy and our future The Council’s revenue and capital spend ensures that its facilities are fit for purpose and safe for the community, to maximise accessibility. Building strong, safe and resilient communities Tackling inequality, ensuring opportunities for all Creating a sustainable Renfrewshire for all to enjoy Ongoing revenue and capital budget monitoring is a tool to enable good financial management so that the Council has resources now and in the future for continued service delivery. Working together to improve outcomes 4. Legal There are no direct implications arising from the recommendations in this report.
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5. Property/Assets The capital expenditure noted in this report will result in lifecycle maintenance improvements to existing properties and replacement of ICT assets and infrastructure. 6. Information Technology While ICT assets and revenue costs are included within these reported budgets, there are no direct implications arising from the recommendations in this report. 7. Equality and Human Rights While new areas of spend may impact on particular groups, any such impact would be assessed prior to the spend being incurred, therefore there are no direct implications arising from the recommendations in this report. 8. Health and Safety The capital expenditure noted in this report will result in lifecycle maintenance improvements to existing properties and replacement of ICT assets, which may in some cases rectify health and safety issues. 9. Procurement While Procurement is an important consideration prior to the Council incurring any revenue or capital spend, there are no direct implications arising from the recommendations in this report. 10. Risk The potential risk that the Council will overspend its approved budgets for the year will be managed at a Council-wide level by the Chief Executive and Directors. 11. Privacy Impact There are no direct implications arising from the recommendations in this report. 12. CoSLA Policy Position n/a 13. Climate Risk The Council aims to reduce its carbon and other emissions to net zero by 2030, however there are no direct implications arising from the recommendations in this report. 14. Children’s Rights There are no direct implications arising from the recommendations in this report.
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____________________________________________________________ List of Background Papers: • Revenue Budget and Council Tax 2024/25, Council 29 February 2024 • Capital Investment Programme 2023/24 to 2027/28, Council 29 February 2024 Authors: Richard Conway, Finance Business Partner Geoff Borland, Finance Manager
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Appendix 1 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 13 September 2024 POLICY BOARD : EDUCATION & CHILDREN'S SERVICES Subjective Summary Annual Budget at Period 3 Budget Adjustments Revised Annual Budget at Period 6 Projected Outturn Budget Variance (Adverse) or Favourable Previous Projected Outturn Variance Movement £000 £000 £000 £000 £000 % £000 £000 Employees 174,814 4,442 179,256 177,989 1,267 0.7% (903) 2,170 Premises Related 9,470 18 9,488 9,807 (319) (3.4%) (286) (33) Transport Related 5,992 5 5,997 6,747 (750) (12.5%) (603) (147) Supplies and Services 33,555 (1,764) 31,791 31,747 44 0.1% 79 (35) Third Party Payments 18,918 0 18,918 19,661 (743) (3.9%) (165) (578) Transfer Payments 14,550 1,354 15,904 16,830 (926) (5.8%) (608) (318) Support Services 53 888 941 925 16 1.7% 13 3 GROSS EXPENDITURE 257,352 4,943 262,295 263,706 (1,411) (0.5%) (2,474) 1,063 Income (1,550) (3,749) (5,299) (6,051) 752 14.2% 187 565 NET EXPENDITURE 255,802 1,194 256,996 257,655 (659) (0.3%) (2,287) 1,628
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Appendix 2 RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2024/25 1 April 2024 to 13 September 2024 POLICY BOARD : EDUCATION & CHILDREN'S SERVICES Objective Summary Annual Budget at Period 3 Budget Adjustments Revised Annual Budget at Period 6 Projected Outturn Budget Variance (Adverse) or Favourable Previous Projected Outturn Variance Movement £000 £000 £000 £000 £000 % £000 £000 Directorate 403 881 1,284 1,292 (8) (0.6%) 7 (15) Early learning & childcare 33,945 (197) 33,748 32,929 819 2.4% 1,293 (474) Primary 65,269 (143) 65,126 63,397 1,729 2.7% (14) 1,743 Secondary 89,989 636 90,625 91,302 (677) (0.7%) (1,691) 1,014 ASN Schools 7,407 (105) 7,302 7,783 (481) (6.6%) (543) 62 Additional support for learning (ASL) 17,896 (184) 17,712 18,612 (900) (5.1%) (900) 0 Psychological services 877 403 1,280 1,280 0 0.0% 0 0 Education development 2,163 295 2,458 2,458 0 0.0% 0 0 Attainment Challenge 0 (484) (484) (484) 0 0.0% 0 0 Facilities management 598 (52) 546 438 108 19.8% 107 1 Children & Families 37,255 144 37,399 38,648 (1,249) (3.3%) (546) (703) NET EXPENDITURE 255,802 1,194 256,996 257,655 (659) (0.3%) (2,287) 1,628
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Appendix 3 Prior Years Approved Budget Revised Projected Expenditure Budget Adjustments Budget Outturn Total Approved Projected to 31/03/2024 2024-25 since previous 2024-25 2024-25 Budget Outurn Project Title Board report to 31-Mar-29 to 31-Mar-29 £000 £000 £000 £000 £000 £000 £000 EDUCATION & CHILDREN SERVICES Primary Schools Estate Programme(SEMP) 10,422 202 0 202 202 0 0% 10,623 10,623 0 0% Paisley Grammar New Campus 6,707 45,044 (17,906) 27,138 27,138 0 0% 85,600 85,600 0 0% Thorn PS New Build 79 9,921 (8,921) 1,000 1,000 0 0% 14,000 14,000 0 0% Dargavel Extension (Modular Units) 2,133 117 0 117 117 0 0% 2,250 2,250 0 0% DPS2 New Build 0 10,000 (9,000) 1,000 1,000 0 0% 44,500 44,500 0 0% Other Schools Investment Programmes 0 213 0 213 213 0 0% 213 213 0 0% Total Schools Estate(inc Early Years) Programme 1,553 302 0 302 302 0 0% 563 563 0 0% PMHS Extension 0 5,000 (4,000) 1,000 1,000 0 0% 30,000 30,000 0 0% Technology Replacement Strategy ICT 0 651 0 651 651 0 0% 1,851 1,851 0 0% TOTAL EDUCATION & CHILDREN'S SERVICES BOARD 20,894 71,450 (39,827) 31,623 31,623 0 0% 189,600 189,600 0 0% *Rolling programmes have a prior year year expenditure of £0 as the expenditure is not directly linked from one year to the next as a singular project. CAPITAL INVESTMENT STRATEGY - NON-HOUSING SERVICES Budget Variance (Adverse) or Favourable Current Year 2024-25 Budget Variance (Adverse) or Favourable Full Programme - All years RENFREWSHIRE COUNCIL 1st April to 13th September 2024 POLICY BOARD: EDUCATION & CHILDEN'S SERVICES